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CCI asks Coal India to examine spot e-auction scheme afresh

Fair trade regulator CCI has asked Coal India to examine afresh its spot e-auction scheme to obviate possible violation of competition norms even as the watchdog rejected a complaint of unfair business practices against the state-owned miner. Earlier also, Coal India Ltd (CIL) had come under the scanner of the Competition Commission of India (CCI). In December 2013, the regulator had imposed a fine of Rs 1,773 crore on the miner which has challenged it. In the latest instance, it was alleged by DB Power that CIL and its subsidiary Northern Coalfields Ltd abused their dominant positions with respect to spot e-auction of coal. Competition Commission of India (CCI) considered 'sale of non-coking coal to the bidders under spot e-auction scheme in India' as the relevant market in the present matter. While CIL and its subsidiaries were found to be dominant in the relevant market in earlier cases, the Commission said no case of abuse of dominance by opposite parties is there. However, CCI said it was constrained to note that the e-auction scheme has come up in challenge in various cases where buyers have alleged lack of reciprocity and mutuality of obligations in the terms and conditions thereof. "The Commission, therefore, believes that it would be appropriate that CIL examines the entire scheme afresh after inviting suggestions from the stakeholders." "Such participatory and consultative process would not only inspire confidence of the stakeholders but such exercise would also make the scheme more acceptable besides obviating any possible violation of the provisions of the Act and challenge there to," the order, dated November 17, it said. Besides, the regulator said that such an exercise should preferably be completed within 60 days from the date of this order. Even though no contravention of competition norms have been found, the regulator said it is still apparent that the parties are either aggrieved of the terms per se or the conduct emanating there from. With regard to rejection of the complaint, CCI said it is of considered opinion that once the terms of sale were put in plain words in the scheme and the notification, the agreement has to be construed accordingly and not on the basis of some perceived understanding of the commerce by individual buyer. "... the stipulation in the scheme envisaging levy of 'any other charges' at time of delivery may not be unfair per se as such terms have to be construed in light of other levies and accepted norms of interpretation and the same cannot be invoked to charge a totally unrelated levy," the order said. "So far as the allegation of the informant relating to charging of excess statutory levies/ taxes/ cess/ royalty etc from the bidders without reimbursing the same to the government, is concerned, the Commission is of opinion that the same is a taxation issue and not a competition issue," it added.

source: http://www.moneycontrol.com